LIC Housing net up 30% to Rs 76 crore

Repricing of loan portfolio helped LIC Housing Finance report 30 per cent y-o-y rise in net profit for the September quarter.

The mortgage lender's net profit in the second quarter of 2006-07 was Rs 75.93 crore up from Rs 58.36 crore a year earlier. Compared with the first quarter of 2006, net profit was up by 102.69 per cent from Rs 37.46 crore at the end of June 2006.

Director and chief executive S K Mitter said, "During the second quarter, the company was able to improve margins significantly, and also maintain asset growth. We had hiked lending rates by 75 basis points over 9 months and were able to deflect rise in interest rate on to our loan portfolio."

Net interest margin (NIM) increased to 2.66 per cent from 1.73 per cent in the previous quarter, despite cost of funds standing at 7.71 per cent.

Interest income for the quarter ended September 2006 was Rs 377.26 crore against Rs 301.23 crore a year earlier, up 25.23 per cent. Interest expenses for the second quarter was Rs 260.74 crore, up from Rs 205.69 crore a year earlier.

The outstanding mortgage portfolio (individual loans) as on September 30, 2006 was Rs 15,428 crore, up 20 per cent from Rs12,813 crore a year earlier.

"We expect the outstanding loans portfolio to grow by 25 per cent by the year-end," said Mitter. During the second quarter ended September 2006, the company sanctioned Rs 1,341 crore and disbursed Rs 1,172 crore.

The company's provisioning at Rs 262 crore stood at 44 per cent of the gross non-performing assets. Net NPAs was 2.11 per cent at the end of September this year.

The capital adequacy ratio was 14 per cent, in excess of the National Housing Board's specification of 12 per cent.

Total income for the second quarter ended September 2006 was up by 23.88 per cent to Rs 384.31 crore from Rs 310.22 crore a year earlier.

Additional provision (over and above the stipulations of the National Housing Bank) in respect of non-performing assets (NPA) are made as per the guidelines prescribed by the board.

In respect of sub-standard assets, additional provision has been made for the current half year at 5 per cent against 10 per cent for the year ended March 31, 2006.

This change has the effect of reducing the provision for NPA by Rs 204.40 million and increasing the profit before tax for the half year by the like amount.